Rewinding to Betamax: The path to consumers’ “right to record”

30 years ago today, a landmark ruling set technology free.

Betamax

Finally, after 15 years of fits and starts, Sony found a hit in the Betamax, which began selling in the US in 1976.

It was priced at $1,295—actually quite a bit cheaper then the U-matic when one accounts for 1970s inflation rates—and it positively flew off the shelves. So did $16 blank Betamax tapes, which were in short supply for some months after the launch.

"There were so many wealthy people who wanted to be the first in the neighborhood that it just went whoof—like a vacuum," Harvey Schein, the head of Sony America, told Lardner.

With the Betamax, movie studios took notice. Before the end of the year, Universal Studios sued over the device.

A public debate over home recording had begun. On the Walter Cronkite show, a Universal Studios executive debated Schein, calling him a "highwayman."

"What right do you have to tell me or anybody else what I can or cannot do in the privacy of my bedroom?" asked Schein. He recounted to Lardner:

Are you telling me… If I'm watching Columbo and I've invested 55 minutes in it, and he's just about to reveal who the murderer is, and I'm called to the telephone—or nature calls—that I can't flip on my tape recorder? Would you want me to watch the whole thing all over again to see what happened—six months or two years later, or whenever it comes up in reruns? And he said, 'Yes.' I said, 'You must be kidding!'

As for the well-to-do households that were considering such a purchase, the controversy only made them want it more, said Schein. "Well, Jesus, we'd better go out and buy one soon," was how he described their thinking, "because otherwise we're not going to get the chance."

The Mickey Mouse Club in court

“If it were possible to restrict [using Betamaxes] to the recording of presidential addresses, I would have no problem with that.”

By early 1979, studio lawyers were demonstrating the power of Betamax to a Los Angeles judge. US District Judge Warren Ferguson, a Democrat appointed to the bench by President Lyndon Johnson, had overseen the litigation and would write the decision, since neither side wanted trial by jury.

"Rarely has The Mickey Mouse Club had such a high-priced audience of adults," reported the entertainment newsletter Daily Variety on the morning of opening arguments. "More than a dozen attorneys (probably charging $100 to $200 an hour), a federal judge, and assorted clerk aides watched intently yesterday as a Betamax poured forth the familiar strains of 'M-i-c-k-e-y M-o-u-s-e.' One lawyer squatted on the floor for a better view and received a lecture from the judge about courtroom demeanor."

A Disney exec testified about canceled deals to let Mary Poppins or The Jungle Book be broadcast on cable networks because of fears about of "six or twelve" home recorders in a city.

The Betamax was a "parasitical" device, said the MPAA's famous president, Jack Valenti. Courts shouldn't "intrude in the home," he said even as he argued that content owners deserved some compensation for the sale of each device.

Under cross examination, Sony's lawyer Dean Dunlavey asked Valenti: If President Carter addressed the nation on a topic of current interest at 9:00pm Eastern time, as he was fond of doing, and if Dunlavey were still stuck in Los Angeles traffic at 6:00pm Pacific time—was there something wrong with recording the president's words for later listening?

"If it were possible to restrict" using Betamaxes "to the recording of presidential addresses, I would have no problem with that," said Valenti.

Copyright owners had a legitimate right to be concerned about time-shifting of their content, a parade of witnesses argued. The business of free television actually depended on measuring not just how many people watched a program but when they watched it, said Valenti.

But the studios had a few major problems making their case. First of all, they were more profitable than ever. Second, the Japanese corporation they had hoped to paint as an uncompromising bandit had rallied several paragons of American culture to its cause.

Fred Rogers, the star and producer of the long-running PBS show Mister Rogers' Neighborhood, testified on Sony's behalf. Rogers wanted the biggest possible audience, full stop, he told the court; Sony and its competitors were his allies. Letting harried parents save his show for later viewing was "a real service," he said.

The National Football League and National Hockey League were also enthusiastic about home recording, and their executives said so. (It's hard to imagine today's NFL taking such a position.)

In closing, the studios' lawyer took a parting shot at the idea that Sony's customers were at home listening to presidential addresses. "That's just a lawyer's argument," he said. Surveys showed that Betamax users were in fact copying TV shows and movies that were owned by others—and Sony's executives knew it perfectly well. Sony had actually broadcast ads telling potential customers that a Betamax owner wouldn't have to choose between watching Columbo and Kojak (both Universal-owned TV programs).

Sony won the trial.

"Home-use recording from free television is not copyright infringement, and even if it were, the corporate defendants are not liable and an injunction is not appropriate," wrote Ferguson in his 1979 decision.

Neither Sony's product nor those of its competitors would be banned from shelves. The companies could sell, and on their own terms. By October 1981, three million of what came to be known as VCRs had been sold, making them the hottest-selling gadgets since color television itself.

Sony soon had to focus not on legal battles but on its competition. JVC, a subsidiary of Panasonic, was pushing ahead with the VHS format machines that were rapidly eating Sony's market share.

Overturned

But in October 1981, a bombshell upended what seemed like a settled legal landscape. Ferguson was overruled by the US Court of Appeals for the 9th Circuit. Home recording rights for music didn't automatically apply to video, said the appellate judges. "Congress has shown special solicitude for audiovisual works," wrote Judge John Kilkenny.

The decision didn't create an immediate sales ban, instead kicking the issue of how to punish Sony back to lower courts, along with instructions not to be "overly concerned" with harm to the Japanese company. "A defendant has no right to expect a return on investment from activities which violate the copyright laws," added Kilkenny.

For many content companies—not just movie studios—this was a welcome return to normalcy and tradition. The Ferguson decision had expanded fair use beyond its historical boundaries, and the 9th Circuit decision seemed to go back to the foundational principles of copyright.

"It is noteworthy that the statute does not list 'convenience' or 'entertainment' or 'increased access' as purposes within the general scope of fair use," wrote Kilkenny.

The decision couldn't have come at a more welcome time for content owners. An increasing number of industries wanted to use copyright as a bulwark of protection against new machines; publishers looked on Xerox machines with fear, while the nascent computer software industry was concerned about rampant copying of its work.

But the battle wasn't over; it was simply shifting across the country, to the Supreme Court and into the halls of Congress.